The biggest shake-up of the NHS in 60 years represents a "hazardous journey" with a "real danger of failures in quality of care or finances", said the body representing the health service establishment in its submission to the NHS white paper.

The NHS confederation, which represents 95% of NHS bodies and includes chief executives of health trusts and most senior managers, identified "significant risks, worrying uncertainties and unexploited opportunities" in the government's health reforms.

Andrew Lansley, the health secretary, unveiled a radical pro-market agenda for the health service in England in July that would permit hospitals to leave public ownership to become "not for profit" companies, hand more consumer powers to patients and allow failing medical centres to go bust.

As part of the plan, England's 35,000 GPs will be handed £80bn of taxpayers' money and be forced to form consortiums by 2013. There will be no opportunity to opt out of the new system. Up to 500 consortiums will commission treatment from hospitals on behalf of patients.

Nigel Edwards, acting chief executive of the confederation, said there were "very deep worries" about the transition.

"This is the area where people's concerns have been greatest because there is a real danger of failures in quality of care or finances. We are about to embark on a hazardous journey at a time when resources are hugely stretched. The risks are very real indeed," he said.

He added: "Radical change [will] require a major shift in culture and the way the NHS does business, as well as a shake-up of institutions. The fact of the matter is that the government is planning to build a very big new machine – at great pace – but no one can be quite sure what will happen when it is switched on."

Giving NHS bodies more autonomy – and taking away the health secretary's powers over the NHS – will mean an unmet public "expectation" that ministers will be unable to "act to deal with problems in individual providers, intervene to deal with variation and respond to public outcry about specific, often detailed issues, relating even to individual patients".

The confederation also warned that there was public concern over a postcode lottery in health and that patient choice was not a powerful enough mechanism to change the NHS.

Edwards warns that it "will be exceptionally difficult to deliver major structural change and make £20bn of efficiency savings at the same time … we have major concerns that this will not be possible with 45% management cost reductions."

Independent experts have already said the government's ambitious plans to reorganise the NHS will cost almost £3bn.

Andrew Lansley responded to the confederation's submission, saying: "The NHS Confederation has recognised that these reforms are about empowering patients and bringing clinicians closer to decision making and I welcome their comments.

"We have made clear in our proposals that consortia will need to engagepatients and the public as they undertake their commissioningresponsibilities and that the commissioning board will hold consortia toaccount in fulfilling that duty.

"I look forward to working with NHS Confederation members to make these essential reforms a reality and revitalise services for patients, staff and the public."

The new shadow health secretary, John Healey, said: "The £3bn for this reorganisation is money that could be better spent on patients. It is a massive distraction when the NHS needs all efforts to improve patient care and find sound efficiency savings." However, Healey signalled a departure from the line of his predecessor, Andy Burnham, who had opposed virtually everything the government proposed, by saying: "Lansley has the right aims but the wrong reforms."